§ 10-14-7.1. Trust accounts for preneed funds.




Current through 2019 Chapter 321

§ 10-14-7.1. Trust accounts for preneed funds

(a) Notwithstanding any provision to the contrary contained in Chapter 1 of Title 7, the "Financial Institutions Code of Georgia," or in any other provision of law, a preneed dealer registered or deemed registered pursuant to Code Section 10-14-5 who provides funeral services shall provide for funds to be deposited in an escrow account pursuant to Code Section 10-14-7 or with a depository institution in accordance with this Code section and placed in an individual trust fund account that is:
(1) Titled in the name of a funeral establishment;
(2) Established for the purpose of providing preneed funeral services;
(3) Payable upon the death of the purchaser in favor of a funeral establishment for purposes of providing funeral services; and
(4) Refundable to the purchaser's designee or the estate of the deceased, such that 100 percent of the trust funds following a deduction of any amounts paid or owing as taxes and a 3 percent charge for administrative costs shall be returned to the designee or estate where funeral services are not provided by the funeral establishment.
(1) One hundred percent of funds to be held in trust shall be deposited in the trust account. The deposit of such funds shall be made not later than 30 days following the last day of the month in which any payment is received. Trust fund accounts shall be established and maintained in a state bank, state savings and loan institution, savings bank, national bank, federal savings and loan association, whose deposits are insured by the Federal Deposit Insurance Corporation or other governmental agency, or a state or federally chartered credit union insured under 12 U.S.C. Section 1781 of the Federal Credit Union Act, or other organization approved by the Secretary of State which is located and doing business in this state.
(A) If the account is maintained with a trustee, the assets of the trust account shall be invested and reinvested by the trustee subject to all the terms, conditions, limitations, and restrictions imposed by Georgia law upon executors and trustees regarding the making and depositing of investments with trust moneys and subject to the limitations and restrictions imposed pursuant to this Code section.
(B) Subject to said terms, conditions, limitations, and restrictions, the trustee of a preneed account shall have full power to hold, purchase, sell, assign, transfer, reinvest, and dispose of any of the securities and investments in which any of the assets of said account are invested, including proceeds of investments. A personal representative shall be authorized to invest funds in:
(i) Interest-bearing deposits in any chartered state or national bank or trust company or savings and loan association located in this state to the extent the deposits are insured by the Federal Deposit Insurance Corporation or comparable insurance; and
(ii) Direct and general obligations of the United States government, obligations unconditionally guaranteed by the United States government, and obligations of the agencies of the United States government enumerated in Code Section 53-8-3.
(C) In making investments pursuant to subparagraph (b)(2)(B) of this Code section and in acquiring and retaining those investments and managing the property of the estate, the personal representative shall exercise the judgment and care, under the circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital.
(3) In the event that the sale of burial or funeral merchandise is under an installment contract, the required trust deposit shall be a pro rata part of the principal portion of each installment payment, such deposit only being required as payments are made by the purchaser for such burial or funeral merchandise.
(c) The trustee shall furnish yearly to the Secretary of State a financial report in a form designated by the Secretary of State with respect to the preneed trust or escrow account.
(d) Upon a finding by a court of competent jurisdiction of failure to deposit or maintain funds in the trust account as required by this Code section or of fraud, theft, or misconduct by a funeral establishment or a funeral director or his or her employee, representative, or agent which has wasted or depleted such funds, the funeral establishment owners, funeral director, or employee, representative, or agent of a funeral director or establishment may be held jointly and severally liable for any deficiencies in the trust account.
(e) Any other provision of law notwithstanding, a trust fund account established and maintained under this Code section and the moneys contained therein shall not be deemed an asset or income for purposes of recapture of income or funds owed or for any other purpose.
(f) Nothing contained herein shall preclude a licensed funeral director in full and continuous charge from maintaining an escrow account with aggregate escrow funds for 100 percent of any preneed contract amount for purposes of passing through funds within 60 days to a trust fund account or payment of a policy of insurance for preneed services.

Cite as OCGA § 10-14-7.1

History. Added by 2012 Ga. Laws 637, §12, eff. 7/1/2012.